OUTSOURCE SETBACK IN CARLSBAD

Council rejects bids to maintain parks, and will try new search

A North County city that’s been on the cutting edge of pension reform and other efforts to reduce labor costs suffered a setback this week on its plan to save millions by outsourcing all its parks maintenance work.

Frustrated with proposals from private contractors seeking to take over the work, the Carlsbad City Council decided Tuesday to reject those bids and start the process over with lower standards.

The goal is to encourage more contractors to apply, because the four who submitted proposals this summer either failed to meet the city’s criteria or proposed rates that yielded minimal savings for Carlsbad.

Instead of requiring contractors to have five years of landscaping experience and three years working for a city, Carlsbad will now accept proposals from firms with “any experience that demonstrates competence.”

That decision was criticized by leaders of the labor union representing the nearly 40 city workers whose jobs have been jeopardized by the outsourcing plan.

“If we keep lowering the bar we will save some money, but I’m not confident it will move us any closer to being a world class city,” said Tye Gillespie, a union leader.

Amy Jordan, the union’s vice president, said the city was right initially to look at outsourcing after a consultant estimated last summer that Carlsbad could save as much as $3.9 million per year.

“You can’t have a company dangle $4 million in front of you and not see whether you could actually have that kind of savings,” Jordan said.

But Jordan said the disappointing results so far should be treated as strong evidence that Carlsbad ought to stick with its in-house parks maintenance staff.

“I say we did due diligence and let’s move on,” she said. But Mayor Matt Hall and the rest of the council voted unanimously to restart the process, saying it was important for city taxpayers to at least see what kind of savings could be achieved.

On Thursday, Hall said outsourcing as many city operations as possible was a key goal of the council.

“We’re trying to be fair to our taxpayers and give them the best value possible,” he said.

He said outsourcing fit well with the council’s other cost-cutting moves.

In 2010, Carlsbad became the first city in the county to lower pension benefits for new hires. In June, it became the first to base pay increases on employee performance instead of granting automatic raises based on years of service.

Outsourcing often creates significant savings for cities. Contractors can charge less than what it costs cities to provide services, because private sector workers don’t have pensions and typically receive lower pay and leaner benefits.

The consultant that predicted Carlsbad could save as much $3.9 million outsourcing parks maintenance said private sector workers typically cost 45 percent to 55 percent as much as city workers. Vista, Escondido and other cities in the region have outsourced some parks work in recent years.

Critics of Carlsbad’s approach say that most cities explore outsourcing only when facing a budget crisis; Carlsbad’s finances are among the strongest in the state.